Belize Social Development Limited v. Government of Belize, No. 10-7167, 2012 U.S. App. LEXIS 727 (D.C. Cir. Jan. 13, 2012) [click for opinion]
Appellant, Belize Social Development, Limited ("BSDL") sued Appellee, the Government of Belize, in the United States District Court for the District of Columbia to enforce a default arbitration award against the Government of Belize. The Government of Belize filed an action in Belize seeking to bar enforcement of the arbitration award. The Belize Supreme Court issued an ex parte interim injunction prohibiting BSDL from pursuing enforcement of the award in any jurisdiction outside of Belize. The Government of Belize also amended the Supreme Court Judicial Act to increase penalties on persons who fail to comply with injunctions.
On the Belize Government's motion, the district court issued an indefinite stay order pending final action in the Belize Supreme Court. BSDL, which did not oppose the Belize Government's motion, appealed the stay order to the D.C. Circuit court. The circuit court noted that a stay was not ordinarily a final decision subject to immediate appeal pursuant to 28 U.S.C. § 1291. Nor did the stay put Plaintiff "effectively out of court" such that the stay could be considered a de facto final decision. The court therefore treated BSDL's appeal as a request for a writ of mandamus, given the "emphatic federal policy" in support of arbitration orders in the context of international commerce.
The court noted that "only exceptional circumstances amounting to a judicial usurpation of power or a clear abuse of discretion" could justify the invocation of the writ. The court laid out three conditions required for invocation of the writ: (1) no other adequate means to attain the relief petitioner desires are available; (2) the petitioner has shown that its right to the issuance is "clear and indisputable;" and (3) the issuing court is satisfied that the writ is appropriate.
The court determined that BSDL had shown a clear and indisputable right to the issuance of the writ, as the district court's stay order was invalid because it was not based on a ground identified in the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention"). The court noted that the only grounds upon which the district court could issue a stay order under the Federal Arbitration Act ("FAA"), 9 U.S.C.§ 201 et seq., and the New York Convention is "if an application for the setting aside or suspension of the award has been made to a competent authority or the country in which, or under the law of which, that award was made." The court explained that, while the original contract was governed by the laws of Belize, the arbitration occurred in London under the arbitral laws of England and, as such, only actions in those courts could allow the district court to issue the stay order. The court also found that the district court abused its discretion in granting a stay that failed either to specify duration or to describe what "resolution" of the case would end the stay.
The court did not vacate the stay or mandate any action by the district court, choosing instead to remand the case for further proceedings consistent with its opinion. One circuit judge dissented, however, contending that mandamus should be reserved only for egregious missteps, not for upending temporary stay orders issued in response to uncontested motions.